Dutch Schultz, a notorious New York City mobster of the 1920s and 1930s, carved out a formidable empire through a range of illicit activities. This powerful figure, born Arthur Simon Flegenheimer, left an indelible mark on the annals of American organized crime, not least for the enduring legend of his millions in buried treasure in the Catskill Mountains.
Schultz’s criminal career was as swift as it was brutal, a testament to the turbulent Prohibition era that allowed figures like him to thrive. His story is one of ruthless ambition, intense gang warfare, and a mysterious hidden fortune that continues to captivate treasure hunters decades after his violent death.
The Early Life and Rise of Arthur Flegenheimer
Born Arthur Simon Flegenheimer on August 6, 1901, in the Bronx, New York City, Dutch Schultz came from humble beginnings. His parents, Herman and Emma Neu Flegenheimer, were German Jewish immigrants. Arthur’s father abandoned the family early in his life, leaving his mother listed as divorced in the 1910 census. To support his mother and younger sister, Arthur left school in the eighth grade, taking on various jobs before finding work at Schultz Trucking in the Bronx around 1916. He remained with the company for about three years, during which time his predisposition for a life of crime began to surface.
Operating in the Bronx slums, Flegenheimer embarked on his criminal path with petty burglaries and theft. This led to his first arrest at the age of 17 and a 17-month prison sentence for burglary. Upon his release in December 1920, he returned to Schultz Trucking. However, the advent of Prohibition dramatically altered the company’s operations, transforming it into a front for smuggling liquor and beer from Canada into New York City. It was during this period that Flegenheimer began associating with known criminals, adopting the moniker Dutch Schultz, a name he felt was more suitable for newspaper headlines than his birth name. He crossed paths with future organized crime titans such as Lucky Luciano and Legs Diamond. Following a dispute, he left Schultz Trucking to work with Italian competitors, signaling his rapid ascent in the underworld.
Forging an Empire: Bootlegging and Speakeasies
By the mid-1920s, Schultz had partnered with gangster Joey Noe, working as a bouncer at the Hub Social Club, a small speakeasy in the Bronx. Together, they formed their own gang, quickly expanding their network of illegal drinking establishments and bootlegging operations across New York City. Their tactics were ruthless; they coerced rival establishments to purchase alcohol exclusively from their syndicate. Schultz famously kidnapped and tortured a saloon owner who dared to refuse their demands, a clear demonstration of the terror he could inspire. Such brutality ensured the Noe-Schultz gang faced minimal opposition as they aggressively expanded their territory.
Their success in the Bronx soon led them to set their sights on Manhattan, a move that ignited a fierce bootleg war with the notorious Irish Mob, led by Jack “Legs” Diamond. This territorial encroachment escalated into bloody violence, marking the beginning of Schultz’s reputation as a merciless enforcer and rival.
Gang Wars, Diversification, and Federal Scrutiny
The conflict with Legs Diamond proved deadly. In October 1928, Diamond ordered a hit on Joey Noe, who was ambushed outside the Chateau Madrid on 54th Street. Though Noe initially survived, he succumbed to his injuries a month later. Devastated by the loss of his partner and friend, Schultz retaliated swiftly, orchestrating the murder of Arnold Rothstein, a kingpin in the Jewish mob and a close associate of Diamond, in November 1928.
By this time, Dutch Schultz controlled a bootlegging enterprise supplying Bronx speakeasies with an estimated $2 million worth of alcohol annually, generating substantial profits. As his operations grew, so did the conflicts, both with external rivals and within his own gang. In 1930, one of his enforcers, Vincent Coll, demanded an equal partnership. When Schultz refused, Coll formed his own crew, initiating another violent gang war with the explicit goal of eliminating Schultz and seizing his territory. Coll eventually met his demise in February 1932, reportedly at the hands of Schultz’s gang. Jack “Legs” Diamond also met a violent end in 1931, further solidifying Schultz’s dominance in the New York underworld.
Expanding Beyond Bootlegging
As Prohibition drew to a close, Schultz shrewdly diversified his criminal interests, moving into illegal gambling, particularly the policy racket, and extorting New York restaurant owners and workers. His methods remained brutal, employing strong-arm tactics such as beatings and stink bomb attacks to enforce compliance. This expansion, however, brought him under the intensified scrutiny of federal authorities.
In 1933, the federal government indicted Schultz on income tax evasion charges. He spent months in hiding before surrendering in November 1934. He faced two trials the following year, but due to hung juries and eventual acquittal, he managed to evade conviction. Despite these legal victories, his troubles were far from over. New York’s special prosecutor, Thomas E. Dewey, a formidable opponent, vowed to prosecute Schultz for his extensive illegal policy racket, turning his sights squarely on the mobster.
The Mob’s Betrayal and the Buried Treasure
Schultz’s mounting legal battles came with exorbitant defense costs, prompting him to reduce commissions paid to those running his rackets. He funneled these funds into what he controversially termed the “Arthur Flegenheimer Defense Fund,” a move that enraged many of his gang members. A mass protest meeting and a virtual strike ensued. When Schultz initially refused to meet their demands, his cash flow dwindled, forcing him to concede. However, these actions irrevocably damaged his relationships with his own crew and other underworld associates. One of his chief lieutenants soon met with Sicilian gangster Charlie “Lucky” Luciano, who was already planning to usurp Schultz’s criminal operations.
In a fit of rage, Dutch Schultz declared his intention to kill U.S. Attorney Thomas Dewey, a decision vehemently opposed by the National Crime Syndicate. Luciano, understanding the catastrophic law enforcement crackdown such an assassination would provoke, argued forcefully against it. An enraged Schultz stormed out of the meeting, vowing to kill Dewey regardless. This defiance sealed his fate. The Commission, the governing body of the National Crime Syndicate, subsequently hired the infamous hit squad Murder Inc. to eliminate Schultz.
Anticipating either imprisonment or his own demise, Schultz took extraordinary precautions with his wealth. He commissioned a special airtight and waterproof safe, into which he reportedly stashed an estimated $7 million in cash, bonds, and gold. Accompanied by his personal bodyguard, Bernard “Lulu” Rosenkrantz, Schultz drove the safe to an undisclosed location near Phoenicia, New York, burying it deep within the Catskill Mountains. This act would give birth to one of America’s most enduring lost treasure legends.
The Assassination and the Cryptic Farewell
The inevitable came on October 23, 1935. While Schultz, Rosenkrantz, his accountant Otto Berman, and chief lieutenant Abe Landau were having dinner at the Palace Chop House restaurant in Newark, New Jersey, two Murder Inc. hitmen, Charles “The Bug” Workman and Emanuel “Mendy” Weiss, entered. They opened fire on the Schultz gang members, hitting all four. Though none died at the scene and were transported to the hospital, all would succumb to their injuries within the next two days.
Schultz, critically wounded, was hit in the spleen, stomach, colon, and liver. Before undergoing surgery, he was baptized and received the last rites from a Catholic priest. He lingered for several hours, finally dying on October 24, 1935, at the age of 33. He was buried in the Roman Catholic Gate of Heaven Cemetery in Hawthorne, Westchester County, New York.
In his final hours, Dutch Schultz delivered a series of rambling and cryptic statements, a delirium-fueled monologue recorded by police stenographers. While he never explicitly named his killers, his words repeatedly alluded to his buried treasure:
- “I’ll get you the cash out of the box… there’s enough in it to buy four-five more…”
- “Lulu, drive me back to Phoenicia…”
- “Don’t be a dope Lulu, we better get those Liberty bonds out of the box and cash ‘em…”
- “Wonder who owns these woods?… he’ll never know what’s buried in ‘em.”
Despite these suggestive remarks, there is no solid evidence that Schultz or Rosenkrantz ever explicitly revealed the safe’s hidden location, turning the search for his money into a fervent obsession for many of his enemies and future treasure hunters alike.
The Enduring Legend of the Catskill Treasure
Schultz, known for his plain-speaking demeanor, was notoriously tight-lipped about his substantial wealth. Unlike other flamboyant gangsters of his era, he avoided flashy attire, extravagant tipping, or purchasing expensive homes and cars, displaying a frugality that stood in stark contrast to his criminal empire. This habit of hoarding, combined with the complete absence of any declared assets or wealth upon his death, lent significant credence to the stories of his hidden “treasure.”
Following his death, locals in Phoenicia, New York, were questioned, with some reporting sightings of two men in fedora hats with shovels in a pine grove along Esopus Creek near Phoenicia. These accounts fueled various versions of the treasure story, many mentioning Phoenicia, and some even referencing a supposed map sketched by Lulu Rosenkrantz.
One popular tale, recounted by an old-timer decades ago, claimed to have seen Schultz and Rosenkrantz stopping for lunch at the Phoenicia Hotel. After their meal, they allegedly drove a short distance before turning onto Route 214, traveling north along Stony Clove Creek for about eight miles. The safe was supposedly stashed beneath a distinct, skull-shaped rock formation known as the Devil’s Face, before they returned to Phoenicia that same afternoon.
Conclusion: A Legacy Shrouded in Mystery
Whether the tale of the hidden treasure is entirely factual or partially embellished, it has undeniably propelled countless individuals to search the Catskill Mountains over the years. The mystery of Dutch Schultz’s buried fortune has permeated popular culture, featured in films, documentaries, and even prompting the use of psychics in attempts to locate the lost loot. To this day, the treasure is believed to have never been recovered, remaining hidden somewhere in upstate New York.
Arthur Simon Flegenheimer, alias Dutch Schultz, remains a fascinating and formidable figure in American criminal history. His life exemplified the violent and opportunistic underworld of the Prohibition era, and his death left behind a legacy not just of a criminal empire, but of an enduring enigma – a vast fortune lost to the Catskill wilderness, waiting to be found.
